The use of credit cards has become wide spread such that a wide variety of goods and services are purchased with credit cards. The latest development in the evolution of credit cards is the multi-purpose credit card which is honored by a large number of businesses over a wide geographical area. Multi-purpose credit cards are now issued by banks and keyed to the holder's account at the bank. With this arrangement, purchases made by the credit card holder may be simply debited against his account with the bank. This is very convenient and eliminates the disadvantages previously involved in the use of limited-purpose credit cards which were only honored by a single store and required issuance of a separate monthly statement and a separate payment.
The use of multi-purpose credit cards has increased losses by businesses through use of fraudulently acquired or stolen credit cards. A multi-purpose credit card is more difficult to police than a limited-purpose credit card since it is used over a wider geographical area and is honored by a large number of businesses. Thus, when a multi-purpose credit card is stolen, it may be necessary to notify thousands of individual businesses throughout the world of the theft.
Recent legislation has reduced the ability of a multi-purpose credit card issuer to pass on the risk of loss to the credit card holder. Previously, this risk was borne to a substantial extent by the credit card holder who could protect himself by carrying credit card insurance. To safeguard the credit card issuer, it is now imperative that a multi-purpose credit card be constructed that is substantially fraud-proof and whose usage can, therefore, be readily policed.
There is presently under consideration the use of multi-purpose credit cards whose usage will be keyed to a central computer. Individual businesses honoring a particular credit card will have a readout device on the premises which will be keyed to the central computer. Before honoring the credit card, it will be inserted into the readout device which will transmit the information on the credit card to the computer. Within a relatively short period, the computer will then either authorize use of the credit card or inform the businessman that the particular credit card has been reported stolen and should not be honored.
The use of such a computerized system may also provide information on the purchasing limits permitted with a particular credit card or whether the credit card holder is in arrears in his payments. Also, the computer may contain information which would indicate a purchase by the credit card holder which was completely inconsistent with his previous purchasing pattern. Given such a computerized system, the use of multi-purpose credit cards will be much more effectively policed to reduce losses from fradulent use.
In devising a multi-purpose credit card for use in a computerized system, it is imperative that the credit card be substantially fraud proof so that it may not be altered to provide false information for the computer. One suggestion has been to merely punch holes in the credit card with the arrangement of holes providing a readout code for the computer. Such a credit card would not be satisfactory because the holes could collect dirt or other debris which would interfere with the readout of information on the credit card. Also, a hole pattern could be easily altered to provide false information for the computer.
A second form of construction which has been suggested is to place a strip of magnetic material on the surface of the credit card with the orientation of magnetic particles in the strip containing coded information which could be read and transmitted to a central computer. This type of credit card construction is also unsatisfactory since the coded information could be altered to provide false information for the computer. For example, by passing the magnetic strip beneath a magnetic head, the magnetic strip could be erased with new and false information then being placed on the strip to confuse the computer.
A still further form of construction which has been suggested is to place bits of magnetic material at preselected locations within a credit card. This type of card is also not satisfactory because it would be difficult to construct and also difficult to read due to the presence of an overlying layer of plastic material.
In providing an essentially fraud-proof credit card, as disclosed in my prior copending U.S. applications Ser. Nos. 223,272 and 273,434, I have devised a card that is constructed with coded information spaces buried within the interior of the card which are concealed from view by the naked eye. The coded information spaces alter the transmissivity of the credit card to radiant energy. Thus, when a surface of the card is exposed to radiant energy, the position of the information spaces may be determined by a radiation sensor placed on the other side of the card which senses a reduction in the radiant energy level or an absence of radiant energy at the location of the coded information spaces.
In providing a credit card with coded information spaces within the card's interior, it is necessary that the information spaces be positioned very accurately. The information spaces must be positioned very accurately with respect to each other and also with respect to the edge or edges of the credit card which are used to position the card with respect to a card reader.
In providing credit cards with coded information placed within their interiors, it is necessary that the cards be capable of mass production to be cost-competitive with existing credit cards. Also, it is necessary that the cards be produced very accurately. Most mass production operations are not characterized by extreme accuracy which is generally not a problem since the goods being manufactured do not require extreme accuracy to function for their intended purpose. However, that is not the case with the present product where the slightest inaccuracy can render the product unusable. Thus, to make the present credit card a useful reality, it is necessary to provide a process which is extremely accurate and yet is capable of mass producing credit cards at a reasonable price.